Schwartz v. Urban Compass, Inc ( 2020 )


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  •                             UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF COLUMBIA
    JILL SCHWARTZ,
    Plaintiff,
    v.                                             Civil Action No. 1:19-cv-00340 (CJN)
    URBAN COMPASS, INC., et al.,
    Defendants.
    MEMORANDUM OPINION
    Jill Schwartz alleges that three of her former colleagues in the real estate industry
    conspired to poach her clients and listings, thereby breaching their contract with her and
    committing several torts in the process. See generally Compl., ECF No. 1. She also alleges that
    Urban Compass, Inc. (“Compass”), was complicit in the scheme.
    Id. The individual
    Defendants, Alexandra Thomas Schwartz, Danielle Spira, and Raymond
    Ferrara, answered the Complaint. See generally Def. Thomas Schwartz’s Answer, ECF No. 20
    at 1–25; Defs. Ferrara & Spira’s Answer, ECF No. 29. Thomas Schwartz also filed a
    Counterclaim. See generally Def. Thomas Schwartz’s Counterclaim, ECF No. 20 at 25–37; see
    also Pl.’s Answer to Counterclaim, ECF No. 28. Compass, for its part, moved to compel
    arbitration as to any claim against it individually and to dismiss those claims. See generally Def.
    Urban Compass, Inc.’s Mot. to Dismiss Pl.’s Compl. and Compel Arbitration, ECF No. 27; Def.
    Urban Compass, Inc.’s Mem. of P. & A. in Supp. of its Mot. to Dismiss Pl.’s Compl. and to
    Compel Arbitration (“Mot. to Compel”), ECF No. 27-1. In turn, Plaintiff petitioned the Court
    for leave to amend her Complaint. See generally Pl.’s Mot. for Leave to File Am. Compl., ECF
    No. 33; Pl.’s Mem. in Supp. of Pl.’s Mot. for Leave to Amend Compl. (“Mot. for Leave”), ECF
    1
    No. 33-1. The Court grants Plaintiff leave to amend in part and stays the sole count against
    Compass while that claim is submitted to arbitration.
    I.      Background
    Jill Schwartz is a real estate agent working in the Washington, D.C. area. Compl. ¶ 3.
    She affiliated with Compass in August 2016, signing an Independent Contractor Agreement
    (“ICA”) that provided her with office space, marketing, and technical support in exchange for
    15% of her real estate commissions. Compl. ¶¶ 9, 66; see also ICA, ECF No. 27-2; ICA
    Appendices, ECF No. 27-3. In 2017 Schwartz recruited three other agents to work as part of her
    “team” under the name “The Jill Schwartz Group:” Alexandra Thomas Schwartz (any relation to
    Plaintiff is unclear from the pleadings), Danielle Spira, and Raymond Ferrara. Compl. ¶¶ 10–13.
    Each signed an ICA with Compass and then separately signed (or orally agreed to, without
    signing) an addendum between the agent and Jill Schwartz laying out commission splits and
    support from the Jill Schwartz Group. Id.; see also Def. Thomas Schwartz’s Addendum, ECF
    No. 20-1 at 2–3. Schwartz’s name went on all official documents and listings, and she received
    the commission on all sales. Compl. ¶ 14. In return, Schwartz split the commission with the
    relevant team member on each sale and provided office space, parking, marketing, and other
    technology support.
    Id. The group
    focused on high-end, luxury properties.
    Id. ¶ 8.
    Schwartz alleges that, by mid-2018, the other team members decided to abandon their
    affiliation with her and form their own team in secret.
    Id. ¶¶ 19–20.
    According to Schwartz, the
    three downloaded a proprietary marketing database, did their own deals on the side without
    crediting or paying Schwartz, took over Schwartz’s license to use a listing database, and
    eventually took over some of Schwartz’s listings after going behind her back to the clients.
    Id. Soon after,
    Defendants openly declared their intention to eject Schwartz from the team and
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    proceed on their own, all while retaining property listings they acquired while relying on
    Schwartz’s assistance and brand recognition.
    Id. ¶¶ 21–22.
    Schwartz sought assistance from Compass’s managers and requested that they terminate
    Defendants’ affiliation with the company, but Compass instead chose to endorse Defendants’
    plan.
    Id. ¶ 25.
    The managers tried to mediate the dispute by dividing the listings between
    Schwartz and her former teammates,
    id. ¶¶ 26–35,
    but the Parties were unable to reach a
    mutually agreeable solution,
    id. ¶ 36.
    At Compass’s insistence, Schwartz terminated her
    affiliation with the company.
    Id. ¶¶ 36–37.
    The agent Defendants continue to be affiliated with
    Compass.
    Id. ¶ 38.
    Schwartz filed a six-count complaint on February 11, 2019, alleging that the agent
    Defendants and Compass engaged in a civil conspiracy to take advantage of Schwartz’s brand, to
    pilfer her listings for themselves, and to force Schwartz to leave the company (Count I).
    Id. ¶¶ 48–55.
    Schwartz also alleges (II) breach of contract (as to the agents),
    id. ¶¶ 56–60;
    (III)
    unjust enrichment (same),
    id. ¶¶ 61–64;
    (IV) breach of contract (as to Compass),
    id. ¶¶ 65–73;
    (V) misappropriation of trade secrets under the D.C. Uniform Trade Secrets Act, D.C. Code
    § 36-401 et seq., Compl. ¶¶ 74–80; and (VI) trademark infringement under the federal Lanham
    Act, 15 U.S.C. § 1125, Compl. ¶¶ 81–91. Schwartz alleges that the Court has federal-question
    jurisdiction over Count VI, 28 U.S.C. § 1331, and diversity jurisdiction over the remaining
    counts,
    id. § 1332,
    because Schwartz is a Maryland citizen, the agent Defendants are District of
    Columbia citizens, Compass is a Delaware corporation with its principal place of business in
    New York, and the amount-in-controversy exceeds $75,000. Compl. ¶¶ 1–7.
    The Parties agreed to undergo Court-supervised mediation, but that process failed to
    resolve the case. See Order, ECF No. 10; Minute Order of Sep. 26, 2019 (lifting stay following
    3
    mediation). Thomas Schwartz answered the Complaint and filed a Counterclaim against
    Schwartz, alleging (I) false advertising under the Lanham Act, 15 U.S.C. § 1125, Countercl.
    ¶¶ 110–22; (II) defamation,
    id. ¶¶ 123–30;
    (III) intentional interference with prospective
    economic opportunity,
    id. ¶¶ 131–41;
    and (IV) unfair competition,
    id. ¶¶ 142–53.
    Thomas
    Schwartz’s Answer contained detailed affirmative defenses arguing that Schwartz’s Complaint
    failed to state a claim for relief on all counts and suggesting that the Court should dismiss the
    Complaint, but Thomas Schwartz did not file a motion to dismiss any count at that time. See
    Def. Thomas Schwartz’s Answer at 12–22. Defendants Spira and Ferrara jointly filed their own
    Answer, which expressly adopted Thomas Schwartz’s arguments against the Complaint. See
    Defs. Spira and Ferrara’s Answer at 11.
    Compass separately moved the Court to compel Schwartz to submit her claims against it
    for arbitration under the binding arbitration clause contained in Schwartz’s ICA with Compass.
    See generally Mot. to Compel. Compass also requested that the Court dismiss the claims after
    sending them to arbitration. See generally
    id. In response
    to the Answers, the Counterclaim, and the Motion to Compel, Schwartz
    sought leave to amend. See generally Mot. for Leave. The proposed Amended Complaint would
    add no new factual allegations but would merely reframe Schwartz’s claims into five new
    counts.
    Id. The proposed
    Amended Complaint would level a single claim against Compass for
    breach of contract and would drop any other allegations against the corporation. Pl.’s Proposed
    Am. Compl. ¶¶ 42–48, ECF No. 33-2. It would also abandon Schwartz’s unjust enrichment and
    trademark claims against the agent Defendants, instead alleging (II) breach of contract,
    id. ¶¶ 49–
    53; (III) conspiracy,
    id. ¶¶ 54–58;
    (IV) breach of fiduciary duty,
    id. ¶¶ 59–63;
    and (V) tortious
    interference with contract,
    id. ¶¶ 64–69.
    Finally, the proposed Amended Complaint would join
    4
    an extra Plaintiff: The Jill Schwartz Group, LLC, of which Schwartz claims she is the sole
    member.
    Id. ¶ 1.
    II.     Analysis
    A.      Motion for Leave to Amend Complaint
    Schwartz sought leave to amend her Complaint more than 21 days after Defendant
    Thomas Schwartz filed her Answer, so Schwartz may not amend as of right. See Fed. R. Civ. P.
    15(a)(1)(B). Instead, she may amend “only with the opposing part[ies’] written consent or the
    court’s leave.”
    Id. 15(a)(2). All
    Defendants oppose amendment, see, e.g., Def. Urban Compass,
    Inc.’s Opp’n to Pl.’s Mot. for Leave to Amend Compl. (“Compass’s Opp’n”), ECF No. 34, so
    Schwartz may only amend her Complaint with the Court’s permission. Fed. R. Civ. P. 15(a)(2).
    Although the “[C]ourt should freely give leave when justice so requires,”
    id., justice does
    not always require the Court to grant leave to amend. “Leave may properly be denied if the
    proposed amendment is futile, such that it would not withstand a motion to dismiss.” Singletary
    v. Howard Univ., 
    939 F.3d 287
    , 295 (D.C. Cir. 2019) (internal quotations and citations omitted).
    The Court may also deny leave in the event of “undue delay, bad faith or dilatory motive on the
    part of [Plaintiff], . . . [or] undue prejudice to [Defendants].” Foman v. Davis, 
    371 U.S. 178
    , 182
    (1962); Elkins v. District of Columbia, 
    690 F.3d 554
    , 565 (D.C. Cir. 2012).
    Each group of Defendants adopts variations on those arguments in opposing Schwartz’s
    Motion. First, Compass argues that amendment would be futile because the count targeting
    Compass would still be subject to the ICA’s binding arbitration clause, and thus would be
    dismissed. See generally Compass’s Opp’n. Thomas Schwartz renews the arguments she
    included in her Answer, asserting that the new legal theories still fail to state a claim and that
    amendment is thus futile because the new Complaint would not survive a motion to dismiss. See
    generally Def. Thomas Schwartz’s Mem. of P. & A. in Opp’n to Pl.’s Mot. for Leave to File Am.
    5
    Compl. (“Thomas Schwartz’s Opp’n”), ECF No. 36. Thomas Schwartz also argues that
    Schwartz brings her proposed amendment in bad faith. See generally
    id. Finally, Defendants
    Spira and Ferrara argue that they would be prejudiced by any amendment and that The Jill
    Schwartz Group, LLC is not a proper Plaintiff that can be joined under Federal Rule of Civil
    Procedure 20. See generally Defs. Ferrara and Spira’s Opp’n to Pl.’s Mot. for Leave to Amend
    Compl. and to Join Jill Schwartz Group, LLC as Pl. (“Ferrara and Spira’s Opp’n”), ECF No. 35.
    1.      Futility
    Thomas Schwartz’s briefing steps through detailed analyses of each count in the
    proposed Amended Complaint and offers thorough arguments for why each allegation would fail
    to state a claim for relief under Federal Rule of Procedure 12(b)(6). See Thomas Schwartz’s
    Opp’n at 3–15. Her arguments, however, rest on the assumption that she would be able to move
    to dismiss the Amended Complaint once it becomes operative in the first place. Although
    Thomas Schwartz’s response to the original Complaint argued extensively that the Complaint
    failed to state a claim for relief, Thomas Schwartz labeled and filed the document as an Answer
    to the Complaint, not as a Motion to Dismiss. See generally Thomas Schwartz’s Answer.
    Thomas Schwartz did not file a separate motion to dismiss, nor did she attach a proposed order,
    as she would have been required to do had she filed the document as a motion. LCvR 7(c).
    As a result, Thomas Schwartz would not be free to move to dismiss the Amended
    Complaint in its entirety. Ordinarily, “[t]he filing of an amended complaint will not revive the
    right to present by motion defenses that were available but were not asserted in timely fashion
    prior to the amendment of the pleading,” but “a . . . defense that becomes available because of
    new matter in the amended complaint may be asserted by motion.” 5C Charles Alan Wright &
    Arthur R. Miller, Federal Practice and Procedure § 1388 (3d ed. 2020); see also Keefe v.
    Derounian, 
    6 F.R.D. 11
    , 13 (N.D. Ill. 1946) (denying motion to dismiss amended complaint,
    6
    which contained no new factual allegations or legal argument but which merely corrected
    jurisdictional information, because the court had already denied defendant’s motion to dismiss
    original complaint on the same grounds). Thomas Schwartz may be able to move to dismiss any
    new legal theories in the Amended Complaint, such as Counts IV (breach of fiduciary duty) or V
    (tortious interference with contract), but she has already answered corresponding counts for
    breach of contract and conspiracy. See Thomas Schwartz’s Answer ¶¶ 48–60. Thomas
    Schwartz has preserved her affirmative defenses against those claims, including her argument
    that Schwartz has failed to state a claim for relief.
    Id. at 12–16.
    But, having answered the
    original Complaint, Thomas Schwartz may not now move to dismiss the same content merely
    because Schwartz has repackaged it in a new Complaint. 
    Keefe, 6 F.R.D. at 13
    ; see also Fed.
    Agric. Mortg. Corp. v. It’s A Jungle Out There, Inc., No. C 03-3721, 
    2005 WL 3325051
    , at *5
    (N.D. Cal. Dec. 7, 2005) (collecting cases). Amendment is thus not futile.
    Compass is in a different position. Rather than answering the original Complaint, it
    timely moved to dismiss and to compel arbitration. See generally Mot. to Compel. But
    Compass does not premise its Motion to Dismiss on Rule 12(b)(6) grounds; it argues that the
    Court should dismiss any counts against it merely because those same claims are subject to
    mandatory arbitration. See
    id. at 2.
    As explained below, although the claim is subject to
    arbitration, dismissal is not the proper course of action at this time. See infra Section II.B. The
    Court would stay any claims against Compass under either the original Complaint or the
    Amended Complaint rather than dismissing them.
    Id. Furthermore, the
    amendment works to
    Compass’s benefit by simplifying the claims against it and restricting allegations to those clearly
    within the scope of the ICA’s arbitration clause, thereby implicitly conceding Schwartz’s earlier
    opposition to Compass’s Motion to Compel.
    Id. Amendment is
    not futile as to Compass.
    7
    2.      Bad Faith
    In addition to futility, Thomas Schwartz argues that the proposed Amended Complaint
    “conveniently omit[s]” certain factual allegations that are present in the original Complaint,
    namely that Schwartz negotiated certain disputes over property listings and commissions with
    Compass rather than with the agents themselves. Thomas Schwartz’s Opp’n at 7–8 (citing
    Compl. ¶¶ 26, 28, 31).
    “Under some circumstances, motions to amend that are intended to avoid summary
    judgment or otherwise muddy the waters of a court's resolution of the case may be denied as
    brought in bad faith.” Sherrod v. McHugh, 
    249 F. Supp. 3d 85
    , 87 (D.D.C. 2017) (internal
    quotation omitted). Thomas Schwartz does not explain how the claimed omissions here would
    obstruct summary judgment, especially since she will have an opportunity to present evidence on
    the same points at that phase (and can argue that Plaintiff already admitted facts in the original
    Complaint). To the extent that Thomas Schwartz contends that Plaintiff intentionally omitted the
    allegations to thwart dismissal of the Amended Complaint on its face, that concern is
    irrelevant—as stated above, Thomas Schwartz forfeited her opportunity to move to dismiss the
    contract claim by answering it in the first instance, so there will be no motion to dismiss Count II
    of the Amended Complaint. 
    See supra
    Section II.A.1.
    Moreover, the amendment abandons two trademark claims against Thomas Schwartz (as
    well as the claim for unjust enrichment), thus narrowing the claims at issue to those arising out of
    the alleged contractual relationship. Rather than exhibiting bad faith, Schwartz appears to have
    taken Thomas Schwartz’s arguments into account and responded appropriately to avoid
    expending time and resources litigating claims that were unlikely to succeed. See generally
    Proposed Am. Compl.; see also 
    Sherrod, 249 F. Supp. 3d at 87
    (“[P]arties may move to amend
    to clarify and amplify the allegations in their complaint in light of facts learned during discovery
    8
    and arguments made by the opposition.” (internal quotation omitted)). “Preventing a party from
    amending her complaint on the basis of bad faith generally requires an affirmative showing by
    the nonmoving party,” 
    Sherrod, 249 F. Supp. 3d at 87
    , and Thomas Schwartz has not made such
    a showing.
    3.      Prejudice
    Ferrara and Spira argue that permitting Schwartz to amend her Complaint will prejudice
    them because the Amended Complaint contains new legal theories. See Spira and Ferrara’s
    Opp’n at 3–4. They cite to In re Sunrise Senior Living, Inc. Derivative Litig., 
    550 F. Supp. 2d 1
    ,
    5–8 (D.D.C. 2008), which itself cites to appellate decisions finding prejudice where amendment
    would “expand[ ] the allegations beyond the scope of the initial complaint,” Parish v. Frazier,
    
    195 F.3d 761
    , 763 (5th Cir. 1999), or where the proposed amendment “contain[ed] new complex
    and serious charges,” Ferguson v. Roberts, 
    11 F.3d 696
    , 706 (7th Cir. 1993). But in Parish, the
    amendment came after Defendants had moved for summary judgment, 
    see 195 F.3d at 764
    ; in
    Ferguson, trial was 
    near, 11 F.3d at 707
    . In both cases, discovery was complete, so amendment
    would have reopened discovery.
    Id. That’s not
    true here—discovery has not yet started. There
    is no prejudice to Defendants.
    4.      Joinder
    In addition to their other arguments, Thomas Schwartz, Spira, and Ferrara flag a curious
    portion of the proposed Amended Complaint. See Spira & Ferrara’s Opp’n at 4–5. In addition
    to amending Schwartz’s legal theories, the proposed Amended Complaint also seeks to join The
    Jill Schwartz Group, LLC as co-Plaintiff. See Proposed Am. Compl. ¶ 1. Schwartz asserts that
    the company “is a limited liability company organized in the State of Maryland.”
    Id. But Spira
    and Ferrara attached evidence to their briefing demonstrating that there is no such LLC
    registered in Maryland. See Spira & Ferrara’s Opp’n at 4–5; see also
    id. at 7–14
    (attaching
    9
    search results finding no such entity in governmental database). Moreover, Defendants attached
    evidence showing that the LLC is not licensed to do business in the District of Columbia.
    Id. at 15.
    Thomas Schwartz adopted the same argument. See Thomas Schwartz’s Opp’n at 15.
    Federal Rule of Civil Procedure 20(a)(1) specifies the conditions under which “[p]ersons
    may join in one action as plaintiffs.” But assuming that Defendants are correct, The Jill
    Schwartz Group, LLC is, at most, an unincorporated entity that lacks the capacity to sue or be
    sued—it is not a legal “person” within the scope of the rule and therefore cannot join this suit as
    a Plaintiff. See Spira & Ferrara’s Opp’n at 4–5. Schwartz did not reply to any of the three briefs
    in opposition to her Motion and so forfeited her opportunity to submit competing evidence that
    The Jill Schwartz Group is a real company. She has therefore conceded the issue. Kone v.
    District of Columbia, 
    808 F. Supp. 2d 80
    , 83 (D.D.C. 2011).
    To sum up, Defendants’ various arguments opposing amendment are unavailing. The
    Court therefore grants Schwartz’s Motion for Leave to Amend and accepts the proposed
    Amended Complaint as operative in this suit. But The Jill Schwartz Group, LLC is not a proper
    Plaintiff under Rule 20, so the Court dismisses it from the Amended Complaint.
    B.      Motion to Compel Arbitration
    Compass moved to compel arbitration before Schwartz sought leave to amend, so much
    of the argument between them focused on whether the old claims against Compass (apart from
    the breach-of-contract count) fell within the scope of the ICA’s arbitration clause and whether
    Schwartz’s claims against the agent Defendants were also subject to arbitration. See, e.g., Pl.’s
    Mem. in Opp’n to Def. Urban Compass, Inc’s Mot. to Dismiss Pl’s Compl. and Compel
    Arbitration at 4–7 (“Pl.’s Arbitration Opp’n”), ECF No. 31. The Amended Complaint, however,
    has simplified those matters by abandoning any non-contractual claims against Compass. See
    generally Am. Compl. Moreover, the Parties all agree that the arbitration clause does not require
    10
    arbitration of the claims between Schwartz and the agent Defendants. Pl.’s Arbitration Opp’n at
    5–7; Def. Thomas Schwartz’s Mem. of P. &. A. in Opp’n to Def. Urban Compass, Inc.’s Mot. to
    Compel Arbitration at 2–3, ECF No. 30-1; Def. Urban Compass, Inc.’s Reply in Supp. of Mot. to
    Dismiss Pl.’s Compl and Compel Arbitration at 2 (“Reply”), ECF No. 32.
    Having resolved those issues, the only remaining questions are whether to compel
    arbitration and, if so, what do to with Count I of the Amended Complaint while arbitration
    proceeds. The Parties agree that the contract is question is the Independent Contractor
    Agreement (ICA), which Plaintiff signed (but did not date) and which went into effect on August
    1, 2016. See generally ICA. The ICA incorporates four Appendices.
    Id. at 1.
    Appendix IV,
    which Plaintiff initialed, contains the following paragraph:
    Governing Law; Arbitration. This Agreement shall be interpreted
    in accordance with the laws of the District of Columbia. All disputes
    between Broker and Agent will be mediated in New York County,
    New York under the rules of the American Arbitration Association
    or other mediator agreed upon by the parties. The parties will
    equally divide the mediation fee, if any. Any dispute not resolved
    by mediation will be settled by neutral binding arbitration in
    accordance with the rules of the American Arbitration Association
    or other arbitrator agreed upon by the parties. Each party to any
    arbitration or litigation (including appeals and interpleaders) will
    pay its own fees, costs, and expenses, including attorneys’ fees at all
    levels, and will equally split the arbitrators’ fees and administrative
    fees of arbitration. Except as may be required by law, neither a party
    nor a mediator or arbitrator may disclose the existence, content, or
    results of any mediation or arbitration hereunder without the prior
    written consent of both parties.
    ICA Appendices at 10. The Parties have already tried and failed at mediation, so the provision
    above requires that the dispute next go to arbitration.
    Section 4 of the Federal Arbitration Act permits Parties seeking to enforce arbitration
    agreements to petition the district court with jurisdiction over the dispute to compel the Parties to
    abide by the agreement. 9 U.S.C. § 4. Plaintiff implicitly concedes that her breach-of-contract
    11
    claim is within the scope of the agreement, and she does not challenge the agreement’s validity.
    See generally Pl.’s Arbitration Opp’n. Count I thus falls squarely within the scope of the
    provision and must be arbitrated.
    Compass then asks the Court to dismiss that claim outright because there will be nothing
    left for the Court to do with the claim once it is submitted to the arbitrator. Mot. to Compel at 2;
    Reply at 3–4. Plaintiff, on the other hand, asks the Court to stay the claim pending the outcome
    of arbitration in order to retain jurisdiction. Pl.’s Arbitration Opp’n at 7–8.
    Under Section 3 of the Federal Arbitration Act,
    [i]f any suit or proceeding be brought in any of the courts of the
    United States upon any issue referable to arbitration under an
    agreement in writing for such arbitration, the court in which such
    suit is pending, upon being satisfied that the issue involved in such
    suit or proceeding is referable to arbitration under such an
    agreement, shall on application of one of the parties stay the trial of
    the action until such arbitration has been had in accordance with the
    terms of the agreement, providing the applicant for the stay is not in
    default in proceeding with such arbitration.
    9 U.S.C. § 3. Circuit courts are split about whether the stay is mandatory or within the District
    Court’s discretion, but they all assume that a stay is the usual course of action. See Katz v.
    Cellco P’ship, 
    794 F.3d 341
    , 345 (2d Cir. 2015) (collecting cases).
    Compass cites to a single case for the proposition that the District Court can (and should)
    dismiss after compelling arbitration. See Reply at 4. In Invista N. Am. S.À.R.L. v. Rhodia
    Polyamide Intermediates S.A.S., the Court very briefly concluded that the plaintiff was “in
    default in proceeding with . . . arbitration” because it had “refused to arbitrate the claims in its
    complaint,” so it was ineligible to seek a stay. 
    503 F. Supp. 2d 195
    , 207 (D.D.C. 2007) (citing 9
    U.S.C. § 3). Although there is no D.C. Circuit precedent on this question, the Tenth Circuit has
    explained the purpose of the statute’s default clause and what might drive a district court to
    refuse a stay. See Pre-Paid Legal Servs., Inc. v. Cahill, 
    786 F.3d 1287
    , 1294–95 & n.3 (10th Cir.
    12
    2015). The statute allows a district court to dismiss a suit when the party seeking the stay is
    acting in bad faith by trying to get out of arbitration, such as when it doesn’t pay its share of the
    fees or refuses to participate in arbitral hearings.
    Id. If that
    occurs, then the district court can
    vacate a previously entered stay and dismiss the case so that the offending party can’t use the
    litigation to combat the effects of arbitration.
    Id. None of
    those circumstances are present here. The Court will therefore stay Count I of
    the Amended Complaint pending the outcome of arbitration.
    III.    Conclusion
    Defendants’ arguments against permitting Schwartz to amend her Complaint are
    insufficient to overcome Rule 15’s presumption that leave to amend should be freely given. The
    Amended Complaint neatly disposes of most disputes over the question of arbitration.
    Accordingly, it is
    ORDERED that Plaintiff’s Motion for Leave to Amend the Complaint is GRANTED.
    However, Plaintiff The Jill Schwartz Group, LLC is DISMISSED without prejudice. The
    Amended Complaint, ECF No. 33-2, is DEEMED FILED. It is further
    ORDERED that Defendant Urban Compass, Inc.’s Motion to Dismiss Plaintiff’s
    Complaint and Compel Arbitration is GRANTED in part and DENIED in part. Count I of the
    Amended Complaint is REFERRED for arbitration and STAYED in the interim.
    DATE: April 20, 2020
    CARL J. NICHOLS
    United States District Judge
    13